6
Form Factors Options Contact –Chip is embedded in a card –A contact card is inserted into a smart card reader –The contact points on the chip make contact with the card reader Contactless –The chip may be embedded in cards, key fobs, stickers, mobile phones, etc. –A contactless chip requires close proximity to a reader (“tap and go”) –Both the chip and the reader have an antenna and they use an RF (radio frequency) signal to communicate

10
Tomorrow - EMV New and Different Card Inserted FI Communication between the chip card and the terminal – in both directions Terminal to determine, by the Service Code, whether card is magnetic stripe only or chip card - Service code is unique and placed on both the chip and magnetic stripe (begins with a 2 or 6) - Track 2 equivalent on the chip Merchant Acquirer Processor Issuer Processor The Issuer Processor or the FI verifies the request cryptogram and generates a response cryptogram The terminal and chip card verify the response cryptogram

13
Adding a contact chip to a mag stripe card impacts the card ordering / issuing process from both a timing and monetary perspective. A key stakeholder is the provider of card processing services... What type of chip can they support and can they support you? Certification of the chips by the associations is taking between 90 days and six months. Based upon chip type and market availability of the chips, the turn times for card manufacturing should not vary much from mag stripe cards – perhaps adds two weeks. However, bear in mind that there is a growing global demand for chips (China, South America), which could impact chip availability. Card Personalization Considerations

14
Points to Remember Adding a chip to a mag stripe card will increase costs – costs can be impacted by the type and size of chip. You can assume to add about a dollar to the present costs for manufacturing custom cards. Personalization Vendors are exploring ways to lower the costs of chip cards for small financial institutions, including the use of generic design plastics (hot-stamped with the credit union’s logo) and print-on-demand using edge to edge imaging equipment. The fees for personalizing the chips are incremental, and subject again to the type and number of applications being loaded onto the chip. Credit unions should expect these fees to be in the $0.25 to $0.40 per card range. Financial institutions should also ask their processor about possible fees associated with an EMV program (new BINs, key management, EMV transaction fees).

20
Tokenization – what is it?? October 2013/March 2014 October 2014April 2014 / June 2014 Industry standardCard Brand enabled P ay Payment tokens further enhance security of digital payments and simplify purchase experience when shopping on mobile, computers or other smart devices and help reduce fraudulent activity…. Replaces a traditional card account number with a unique payment token / digital account number Restricts the use of a payment token by device, merchant, transaction type or channel Tokenization is the process of replacing the original payment credentials (PAN) with a unique “alternate identifier” which may be used in its stead to initiate payment activity More to come…

21
Global and interoperable Compatible with existing network routing Compatible with existing payment technologies (web, NFC, POS standards) Supports future payment technologies Improved security Regulatory compliant Multiple Payment Tokens can be attached to a single PAN Core concepts A Payment Token is a “alternate identifier” that can be used in place of a Personal Account Number (PAN) to initiate a payment transaction Enables new channels Interoperable Global Supports new participation Secure Minimizes ecosystem impact Payment Tokens Industry standard and service

30
What is your payments roadmap? Ensure your members can access their CU accounts from any channel they choose! Start with implementing EMV Enroll your card programs in tokenization Get ready for the next generation of payments through mobile!